What is meant by the term "virtual power plant"?

The term "virtual power plant" refers to an aggregation of multiple distributed resources, which can include various forms of renewable energy technologies, energy storage systems, demand response resources, and other decentralized energy sources. This concept allows for greater flexibility and efficiency in managing energy supply and demand by coordinating these diverse resources to operate as a single entity.

By pooling the capacities of many smaller, distributed generation units, a virtual power plant can provide power to the grid much like a conventional power plant would, but without the need for large, centralized generation facilities. This enables better integration of renewable energy sources, enhances grid stability, and can result in reduced costs for energy consumers.

In contrast, a network of traditional power plants focuses on centralized generation, while a single energy source supplying the grid lacks the diversity and responsiveness characteristic of virtual power plants. A storage facility for excess energy, while important in the energy landscape, does not encapsulate the idea of a virtual power plant, which emphasizes the collaboration of various distributed resources rather than just storage solutions.